It Sounds Like The Euro Has Become One Of The Hottest Topics On Wall Street

All of a sudden, everybody is talking about the euro.

The currency has risen 8% against the U.S. dollar since July 9, when selling induced by Federal Reserve chairman Ben Bernanke’s June 19 press conference — in which he hinted at tapering quantitative easing, causing strength in the dollar — culminated.

Today, the euro trades just below $US1.38.

Steven Englander, global head of G10 FX strategy at Citi, just returned from client meetings in South America, and he said the thing everyone was asking about the most was the euro.

“The bulk of questions received were on EUR/USD, and our views were into year end,” he writes in a note. “Most clients were happy to see it lower, but conviction was low as to the timing of the move. Views for significant EUR/USD upside were again also limited. Several accounts were buying EUR/USD presently, but discussions of the trade tended to lack medium-term justifications, although several clients cited technical reasons. The dominant view was EUR/USD could rise to 1.40, although investors in European assets were looking to establish hedges on their underlying exposure.”

Société Générale global head of economics Michala Marcussen also says the number-one question from her clients is about the euro.